On the Road to a Spatially More Evenly Balanced Development in Tourism? The Effects of the Tourism Crisis during the Years 1991-1995

Austria's tourism sector will continue to shrink in 1996. Further losses in arrivals (–0.3 percent) and overnight stays (–3.8 percent) in the current tourism year are mainly due to the accelerated decline in the German market segment in the summer months. Currency depreciations in important competitor countries, the increasing substitution of longer vacations based on car transportation by cheap air travel arrangements, new international competition for holidays on Austria's lakes, a decline in real income in Germany, as well as problems with regard to quality, coordination and organization are the essential factors of this development. The main characteristics of this decline have been discernible since the turning point in the development of Austria's market shares at the beginning of the 1990s. Not all tourism areas suffered to the same extent during the years 1991-1995. Areas with few overnight stays outside the main touristic regions of western and southern Austria fared rather well; those areas with intensive tourism relying on the attraction of their lakes, but now exposed to more intense competition, suffered the most. This study analyzes the question to what extent the crisis in tourism in the 1990s has brought about a spatially more evenly balanced development of the tourism industry. This hypothesis is tested for the periods 1985-1991 and 1991-1995 by regression analysis of the form used in the recent debate on economic growth regarding economic convergence. Cross-sectional regressions on the basis of data for political districts in Austria show a slight tendency towards absolute and conditional convergence. In districts with low overnight stays in the initial year, demand for overnight stays grew more rapidly in the period 1985-1991 as well as in the period 1991-1995, ceteris paribus. These tendencies are very weak, however, and are unable to explain most of the variation in regional growth patterns; structural characteristics are more important for the regional outcome. In sum, it is neither exogenous factors nor the level of demand which are the most important factors determining regional touristic demand, but the idiosyncrasies of local and regional agents.